Why small-scale embedded generation is so important

Over the last few years we have seen a move from utility-scale renewable energy procurement, through the REIPPP programme, to a more distributed approach which favours small-scale solar PV. This allows for more participation by South African developers and start-ups and offers opportunities for skills development, entrepreneurship and job creation.

Niveshen Govender

Loosely speaking, any electricity generation under 10 MW of capacity is considered small-scale and, when installed behind the meter, is considered embedded. This gives rise to a new sector: The small-scale embedded generation (SSEG) sector. Solar PV continues to be the generation technology of choice for this sector.

The Department of Energy’s (DoE’s) recent instruction that Nersa process registrations and licenses of SSEG projects, is expected to attract more investment and result in exponential growth. These projects, with a power generation capacity between 1 and 10 MW, will add much-needed power to the grid without the developer having to request authorisation from the minister of energy for deviation from the integrated resource plan (IRP).

The South African Photovoltaic Industry Association (SAPVIA) has been successful in driving progress in the sector by its submission to the Parliamentary Portfolio Committee on Energy (PPCE) where a request was made for an annual allocation of 500 MW of generation capacity from SSEG. But this is only a starting point for where this sector could go and much more could be done.

International experience shows that the role of small-scale solar PV projects can benefit rural communities and smaller local municipalities. With the aim of wanting to reduce their dependency on the national grid, people use small-scale solar PV to provide greater security of supply of electricity, given our country’s history of load-shedding.

With South Africa’s global competitiveness and investor-friendly climate always under scrutiny by international rating agencies, decreasing the country’s carbon footprint, decentralising power supply to create more economic opportunities and dramatically reducing the cost of electricity, should remain one of our government’s strategic imperatives.

The SSEG sector is well positioned to assist government in achieving these imperatives. The cost of rooftop solar PV has dropped significantly in recent years. Through a viable business case, businesses, commercial properties and industry players have started to enjoy the benefits of the uptake of solar PV. Schools, clinics and other public facilities should follow suit. Large metros, like the City of Cape Town, are desirous to generate their own electricity. The City of Cape Town has embarked on a registration initiative of all current and future small-scale solar PV projects to promote safe and legal installations to the municipal grid and to increase planning capacity for quality power generation.

The benefits of the SSEG sector are many and meaningful, and can, with government’s help, stimulate growth, skills development and entrepreneurship opportunities which will create jobs.

In addressing the gap between where the SSEG sector is currently and the sector’s potential, SAPVIA has undertaken to focus on areas such as promoting a standard curriculum for solar PV to strengthen skills development. This has also been matched by a drive to create national standards for SSEG installations and to work closely with municipalities and industry associations such as the South African Local Government Association (SALGA) and the Association of Municipal Electricity Utilities (AMEU), all under the umbrella of SAPVIA’s PV GreenCard Programme with its proposed quality mechanisms.

Over and above the decision taken by the DoE, there are even more positive indications that government will partner with the private sector to drive growth and development. The Public Private Growth Initiative (PPGI) which was recently endorsed by President Cyril Ramaphosa in his 2019 State of the Nation address, serves as further evidence of this. The PPGI looks to the solar PV industry, and oithers, in terms of both utility-scale and small-scale implementation to promote jobs and drive South Africa’s just transition towards clean energy.

Although there is no consensus as to the amount of SSEG implemented to date, it is estimated that hundreds of megawatts of solar PV have already been installed in South Africa. The CSIR estimates that 57 000 jobs will be created between 2019 and 2030 through the PPGI, provided that 1500 MW of solar PV is procured annually within the same period. The transition to clean energy, driven by the clean energy accords South Africa is party to, will drive an increase in the deployment of solar PV, resulting in a dramatic reduction in South Africa’s carbon footprint.

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